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Is it? If we already have evidence of atheists re-writing the Oath and Law to suit their beliefs, is it really so speculative to suggest that they'd push for broader changes if given a nod from the BSA that the organization is flexible on the religious requirement for membership?
When the posted speed limit is 55 mph, people do 65. When it's 65 mph, people do 75.

An unfortunate reality I learned about Scouting is that lots of stuff falls through the cracks. The BSA systems for stuff like this are all paperwork driven. The folks who submit the forms are volunteers, the folks who sign them are volunteers, the folks who send them to the council are volunteers, and the folks who process them are ridiculously underpaid staff.
I think many of the folks with rows of them have simply learned the system. They walk the paperwork through the signatures and drop it off personally. They make sure it gets done.
It's unfortunate that this is what it takes sometimes. But I like our DE and council staff and recognize that they are genuinely trying - so I really don't mind dealing with stuff like this.

Sorry - was away for a few hours. This topic is moving fast.
There are so many ways to handle this one. Here's a few:
be up front with the Scout. Tell him/her that this requirement is coming and that they will not be able to advance past it. His/her choice if they still want to join.
be ridiculously literal. recognize that in the Scouts mind there is no god and so that he has completed his duty to god by doing nothing. Focus on the remaining parts of the Scout law.
project a bit. Discuss the concept of God and what it means to do your duty to God. Have a discussion around how he is living his life in a way that would mirror what those with a belief in God would do.
interpret a bit. substitute "greater good" for God. Have him tell how he has done his duty to the greater good.